February 9, 2018 / 7:28 AM / 6 months ago

South Africa's rand firmer as bulls hang in despite Zuma impasse

JOHANNESBURG (Reuters) - South Africa’s rand firmed on Friday, recouping losses from the previous session as investors continued to bet on the ruling African National Congress (ANC) unseating scandal-plagued President Jacob Zuma in the next few days.

South African Rand coins are seen in this photo illustration taken September 9, 2015. REUTERS/Mike Hutchings

At 1532 GMT, the rand was 0.74 percent firmer at 12.0700 per dollar, having slipped to a three-week trough of 12.2000 overnight. That was just shy of the 12.22 support mark that analysts say may have triggered some technical selling.

“South Africa has held its own, and that’s because of the expectation that Zuma will ousted,” said Peregrine analyst Bianca Botes. “When it does happen, we’ll probably see a big knee-jerk reaction, but it won’t necessarily be sustained below 11.80.”

ANC leader Cyril Ramaphosa pulled out of public events to focus on “pressing matters” on Friday, fuelling speculation that he was making a final push to force Zuma to step down.

Ramaphosa has been lobbying for Zuma to resign and has said he hopes to conclude talks with him over a transition of power “in coming days ... in the interests of the country”.

The rand has been among the best-performing currencies globally, gaining around 20 percent since mid-November, with most of those gains achieved after businessman Cyril Ramaphosa was elected ANC chief in December.

Stocks ended a turbulent week, punctuated by uncertainty around Zuma’s future, with sharp losses.

The benchmark JSE Top-40 index fell 1.3 percent to 49,287 and the broader All-share index fell by the same margin to 55,902.

Decliners included Investec, down 3.6 percent, Old Mutual, off 3.5 percent and Mondi, which fell 3.2 percent.

In fixed income, yield for the benchmark government bond due in 2026 rose 2 basis points to 8.455 percent.

Reporting by Mfuneko Toyana and Tiisetso Motsoeneng; Editing by Kevin Liffey

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